Operator glossary
CPC (Amazon's ad auction)
Amazon ads bill per click through a second-price-style auction: you pay just above the next-highest bid, not your maximum — which changes how bold your bids should be.
Sponsored ads run an auction per impression: relevance-weighted bids compete, and the winner pays roughly one cent above the runner-up rather than their own max. Your bid is a ceiling, not a price — overbidding costs less than the number suggests, and underbidding forfeits auctions your margin could have won.
CPCs vary wildly by category, query intent, and placement; top-of-search carries premiums via placement modifiers. The operator's discipline is bidding from break-even math per keyword — bid ceilings derived from contribution margin and conversion rate, not from what the suggested-bid box whispers.
The numbers
- Winner pays just above the second-highest effective bid — a maximum bid is a ceiling, not the expected price.
- Max sensible CPC ≈ price × margin × expected conversion rate; compute per keyword, not per account.
Primary sources: Amazon Ads guides
Related terms